Glencore strikes up JV with Mexican gas station operator

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Thursday, May 18, 2017

Anglo-Swiss natural resources company Glencore has entered into an agreement with Mexican gas station operator G500 to create a franchise platform to service more than 1,400 affiliated service stations.

The JV, called G500 Network, will be implemented at affiliated service stations and include fuel supply, branding and ancillary retail services, and launched to coincide with Mexico's liberalization of fuel prices, according to a Glencore press release.

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Also read: What are the risks of Mexico's fuel market liberalization?

The move comes as state oil firm Pemex has relinquished its grip on the country's fuel import and retail markets as a result of the 2014 energy reform, and Glencore is the latest in a slew of companies entering the local market, including BP, which opened its first gas station in the country in March, and ExxonMobil, which announced similar plans this week.

Local conglomerate Femsa launched Oxxo Gas last July. The entry of new players into the country's fuel market is expected to bring down prices, which rose sharply at the beginning of the year.

Formed in 2014, G500 is an association of service station owners and currently sells around 160,000b/d of gasoline and diesel, with a nationwide presence and a strong focus on central Mexico. The group accounts for around 12% of the country's service stations, according to the release.